Partner Selection Dilemma in International Strategic Alliances An Empirical Study Using the Propensity Score Matching

Abstract

This study analyzes the alliance strategy and firm performance. When forming a market entry strategy, MNE (Multi National Enterprise) have dilemma whether to rely on the past relationship (repeated partnership) or to find a new partner in the new market (new partnership). In this study, we used propensity score matching method in order to compare the causal effect of the alliance strategy between the treated and control groups with similar covariate distributions. We found that repeated alliance, i.e., exploitation of the existing relationship with existing partners positively impact to the firm performance.